Texturing is not rendering in blender internal
You say you are using Blender render, but your file is set to Cycles render. Your Node tree is wrong, not using the texture image and plugging a Normal coordinate from Texture Coordinate node to Normal of Diffuse shader node.

I added a frame to show yours and then corrected it by using a texture Coordinate node to plug the UV coordinate to the Image Texture node mentioning my own image(yours was not packed into file before upload) and then that Image texture is plugged into the Color socket of the Diffuse shader node.

If you want to use Blender Render then you will need to turn off 'Use Nodes' and add the image through the Properties editor texture panel.